The Watson Weekly: eCommerce Strategy & News

Watson Weekly
  • 5.0 (35)
  • Management
  • Updated Weekly

Stop reading the headlines and start understanding the frameworks. The Watson Weekly is the premier resource for eCommerce executives, delivering sharp, independent strategy on the industry's most critical developments. Join 20-year veteran Rick Watson as he cuts through the noise to help you understand not just what is happening, but why it matters to your business. Broadcasting three times a week: Mondays: Strategic deep dives into earnings, mergers, and market shifts. Wednesdays: Candid interviews with C-Suite luminaries and tech innovators. Fridays: Join the Watson Weekend for Spirited debates on controversial topics with co-host Jessica Lesesky. From AI implementation and marketplace dynamics to supply chain logistics and retail operations, we cover the entire commerce landscape. Whether you are a CEO, VP, or operator, this is your competitive advantage in audio form.

  1. 2d ago

    Walmart's 11K Rollbacks and Who Actually Pays for Them

    Walmart ran 11,000 rollbacks last quarter, roughly double the same period a year ago, and the money paying for them comes from a business most of its competitors don't have. Advertising and membership now account for about a third of Walmart's operating income and grew 38% in the quarter. Rick Watson and Jessica Lesesky go through what that does to everyone on the other side of the table: suppliers facing another round of concession requests, grocers without a profit pool deep enough to fund a price war, and Target, which took its tariff relief to the bottom line while Walmart handed its own back to shoppers. They also get into the 17% of affluent shoppers who now start their trip at Walmart, what a vendor can realistically do about pack sizes when the rollback ask keeps coming, and whether 28% ecommerce growth counts as ecommerce growth when a store associate does the picking. The Watson Weekly Weekend is sponsored by Avalara. Learn more at avalara.watsonweekly.com #walmart #advertising #walmart+ #rollback

  2. 4d ago

    The CFO Who Didn't Care About a 35% Return Rate

    Kyle Bertin thinks the industry has the returns conversation backwards. His company, Two Boxes, builds software for the section of the fulfillment center nobody wants to walk into, and his argument is that returns are an inventory management problem. He calls it the least optimized inventory pool most merchants own. The math he runs uses a hypothetical $100 million apparel brand. A 25% return rate sends $25 million of GMV back through the door, and at the 50% restock rate he sees in unoptimized operations, half of that never makes it back to full-price sale. Bertin says 80% restock is achievable across his customer base, which frees roughly $7.5 million of inventory and, after sell-through and gross margin, puts the net income impact between $3 and $5 million. For context on what that means against a real P&L, public apparel brands have spent the past several quarters working to hold net margins in the low double digits. He also tells the story of a footwear CFO who looked at a 35% return rate a few years ago and said, directly, that he did not care. At the time the reasoning held up. He was buying at under 20% COGS out of Vietnam, bringing it in duty-free under the Section 321 de minimis exemption, financing inventory in transit at close to zero interest, and answering to investors who rewarded growth over profitability. Bertin takes each of those conditions apart in turn, which is his explanation for why the inbound started as a trickle in 2023 and hasn't slowed. We also get into what has to change on a 3PL warehouse floor, where AI is doing real work in returns processing and where it isn't, the new Radial partnership, and Bertin's claim that only about 5% of returned items are genuinely unsalvageable. This Watson Weekly interview is sponsored by Radial. #watsonweekly #supplychain #returns #inventorymanagment

  3. 5d ago ·  Bonus

    Three Years In, We Finally Ranked the Stores We Actually Shop

    Three years of the Watson Weekly, and Rick Watson and Jessica Lesesky mark it by doing the one thing a retail show almost never does on air: putting a grade next to the stores they actually shop. It is a tier list. S through C, live, no rubric shown to the audience. Alo Yoga takes the only S, on a hundred-plus stores, international expansion into London and Korea, and a King Street address in Charleston sitting between Skims and Gucci. Rick admits he was a hater first. Amazon lands at A on the strength of everything that isn't retail, including an ad business Jessica sizes at $56 billion, and lands there in spite of an experience Rick says has been crapped on by its own advertising. Lululemon and Nordstrom both stop at B. Eight varieties of pants that nobody working the floor can explain, and a service standard Nordstrom wrote for itself that Rick clocked hitting about fifty percent across four recent visits. Target does not get a letter. It gets a sell. Two years without a CMO, stores still out of stock, a rough back to school, and an insular Minnesota culture that Rick argues rejects outside ideas faster than it can hire them. Walmart gets a buy. Plus: Whole Foods as a returns counter that occasionally sells milk, why the Rack keeps outrunning the mothership, what Dick's is really buying with Foot Locker, and Jessica's ongoing Nuuly problem.

  4. 6d ago

    Tariff Refund Quarter: Walmart's 28.8%, Target's $994M, and Lowe's 11 Cents

    Walmart collected about $2.9 billion in tariff refunds and spent it on roughly 11,000 rollbacks in Walmart US. Transactions grew and operating income rose 28.8%. The comp still slowed to 2.6% excluding fuel, the weakest quarter since 2020, with the softness concentrated in lower-income households. Walmart raised full-year guidance on the assumption that the second half improves on the back of that price investment, which puts a refund that will not repeat into the base of next year's math. Lowe's earned $4.27 a share on $2 billion more revenue than last year, when it also earned $4.27. Comparable sales rose two tenths of one percent. Almost all of the revenue growth was acquired, from a building products distributor and an interior finishes installer that sell into new residential construction, and Lowe's removed the top of its full-year outlook four separate times on the call. Online grew 15.7%. The release blames persistent do-it-yourself macro pressure for the rest, which is a long way of saying the Saturday deck lumber customer has not come back. Target's traffic did come back. Comps grew 3.8% with 3.6 points from traffic, and apparel and accessories grew $4 million on a $4 billion base. Ipsy is launching a marketing services arm and will no longer say what its revenue is. Six years ago it published 4.3 million subscribers and a billion dollars. Plus the Investor Minute: Ferrero buys Purely Elizabeth, Amazon buys DuckDB Labs but not DuckDB, Mubadala takes majority control of Arrive Logistics, Blank Street raises $105 million, Lavanta raises $22 million. The Watson Weekly is sponsored by Avalara. Tax compliance gets harder with every new channel, state, product and market. See what Avalara Agentic Tax and Compliance does about it at avalara.watsonweekly.com #watsonweekly #walmart #lowes #target #ipsy

  5. Aug 24

    Google Buys a Dead Airline's Data, Mom Outranks TikTok, QXO's $55M Loss, Stripe Bids for PayPal

    Spirit shut down on May 2 with roughly $8.1 billion in debt and about 17,000 people out of work, and the estate has been selling the pieces since. A court approved 22 LaGuardia slots to JetBlue for $58.5 million in July. Last week's lot was the data. The August 14 notice out of the Southern District of New York itemizes 100 million emails, 500 million Microsoft Teams chats, around 30 million lines of code, pricing from 7.2 billion competitor flights, 7.5 billion passenger transaction records going back to 2008, and more than 175,000 employee records dating to 1986. Google says a third party will scrub personally identifiable data before the handover. Rick thinks $10 million is low, and that the next liquidation will have somebody in the room asking what the internal record is worth. A HarrisX and Allison Worldwide study of 705 teens aged 13 to 16 and 750 parents puts Mom ahead of any platform, creator, or celebrity on which brands Gen Alpha teens end up liking. Dads introduce new brands at 60% against 39% for moms, but moms carry which brands the kid actually likes, 73 to 58. Nike sits first with dads and Walmart first with moms. Any plan that treats parents as a single line item is funding discovery and approval at the same weight when the survey says those are two jobs held by two people. QXO reported $3.25 billion in quarterly sales against $1.91 billion a year ago, with a $55 million net loss and $130 million in adjusted net income. Kodiak Building Partners accounted for about $595 million of the top line. Brad Jacobs told investors he wants $50 billion within a decade. He did not break out organic growth. PayPal traded above $300 a share in 2021 at a market value north of $280 billion. The Wall Street Journal reports that Stripe and private equity firm Advent International approached in July at $60.50 a share, valuing the company near $53 billion. PayPal called the price insufficient and the two sides have been negotiating since. Also this week, the Investor Minute: MUD Jeans files for bankruptcy, Home Depot-owned SRS Distribution moves for Noland Company, and 3 funding announcements. The Watson Weekly is sponsored by Avalara. For e-commerce brands, tax compliance gets harder with every new channel, state, product, and market. Avalara Agentic Tax and Compliance automates the work behind the scenes so merchants get accurate tax at checkout, clear visibility into tariffs and duties, and fewer surprises when the order arrives. More at avalara.watsonweekly.com Subscribe to the newsletter and find every episode at watsonweekly.com

  6. Aug 21

    Stripe wanting PayPal says more about Stripe than about PayPal

    Rick Watson and Jessica Lesesky work through the reported talks, and Rick lands firmly on the skeptical side. Stripe grows around 34% a year by the hosts' count, throws off billions in cash flow, and has spent years buying up pieces of the stack, including Indie Hackers, Payable, Index, and Lemon Squeezy. It runs in stablecoins, crypto, and AI routing. The one thing missing is a consumer relationship, which is what PayPal and especially Venmo are supposed to supply. Jessica's counterpoint is that the PayPal button already lost that fight to Apple Pay and Google Pay, partly because she forgets her login half the time. Rick's objection is harder. PayPal has not grown since 2021, so this is a volume purchase rather than a growth one. The Shopify piece is where merchants have something at stake. Shopify has put over $350 million into Stripe and accounts for roughly 13% of Stripe's volume, and it built Shop Pay while PayPal watched, which Rick calls one of the most criminal things to happen in payments in twenty five years and intends as a compliment. Shopify still routes partner payouts to app developers and integrators through PayPal. PayPal's European coverage reaches markets Stripe's does not. Every one of these companies is renting something from a competitor. Jessica's read for merchants is the payments version of the argument she makes about sales channels. You take Shop Pay because at this point it is universal, and then you go looking for diversification everywhere else. What she leaves unanswered is how a brand holds onto a customer when the checkout, the wallet, and the payout rails all belong to somebody upstream. The Watson Weekly Weekend episode is sponsored by Avalara. Learn more at avalara.watsonweekly.com

  7. Aug 19

    The B2B Order Management Problem Distributors Don't Know They Have

    The storefront stopped being the differentiator. Kibo CEO Ram Venkataraman argues the money and the difficulty both moved to order management, and that most B2B distributors have an OMS problem they have no name for. Rick opens on accountability. An autonomous agent takes an order, routes it to the wrong warehouse, approves a return it shouldn't have. Who owns that outcome? Ram says shoppers will blame the retailer every time, and the burden falls on vendors to build systems that earn the retailer's trust. He also draws a line most vendors blur. Kibo's routing runs on machine learning models, not LLMs, because LLMs stay too probabilistic for that job today. The LLM work sits in configuration and explainability, and every write operation keeps a human in the loop. Also in this episode: why Ram calls OMS the margin layer and a conversion rate optimizer; how account hierarchies, quoting and scarce supply make B2B order matching harder than first come first served; Ace Hardware as roughly 5,000 separately owned businesses running their own pricing on one platform; Vulcan Materials selling construction aggregates by the truckload to contractors and by the bag to homeowners; Kibo's path from Vista's 2016 roll-up through the Mozu rebuild and the Certona and Monetate divestiture; and Ram's answer on what the Forrester Wave placement should mean to a buyer. The commissioned Forrester Total Economic Index study can be found here: https://kibocommerce.com/resource-center/forrester-total-economic-impact-oms/ Plus the one tell that exposes a distributor with an order management problem. Out of stock on the website while the product sits in the warehouse. The Watson Weekly interview is sponsored by Avalara.. See what they built for growing brands at avalara.watsonweekly.com Chapters 00:00 Who owns the outcome when an agent gets the order wrong 03:04 What Kibo is and the four complexity vectors 07:00 Why the energy moved to the back office 09:20 What B2B calls order management instead 13:01 Ace Hardware and Vulcan Materials 16:28 Sponsor: Avalara 19:48 Engage, configure, explain, analyze, optimize 23:20 Deterministic vs non-deterministic order workflows 25:55 Where Kibo's growth is coming from 29:09 Vista, Mozu, and the Forrester Wave 33:50 The one sign you have an OMS problem #watsonweekly #KIBOcommerce #ordermanagement #b2bcommerce #acehardware

  8. Aug 17

    Cohen May Drop the $56 Billion Bid and Keep the 9.8%

    Ryan Cohen may pull the $56 billion eBay bid. Bloomberg reported Monday that GameStop is weighing a partnership instead, opening roughly 1,600 stores to eBay for cards and collectibles while taking board seats. Reuters could not independently verify it. The 9.8% stake GameStop disclosed in July is what makes the governance ask possible. QVC is out of Chapter 11 with more than $5 billion less debt, a $600 million ABL facility, and Mike George back as interim CEO. Creditors took equity and equity took seats. The one name worth watching built TikTok Shop. Numerator puts 22% of US households on a GLP-1, double the October 2023 reading. Those households spend almost 4% less at grocery after a year, pulling out of pantry staples and into protein and skin care. Nearly two-thirds of former users quit inside six months. Shein's Hong Kong IPO filing shows US revenue down more than 3%, Q1 US sales down 14%, and a $99 million quarterly loss against $395 million a year earlier. Services revenue grew 40%. Brand enablement runs at twice the company margin on 1% of revenue. The Watson Weekly is sponsored by Avalara. Learn more at avalara.watsonweekly.com #ecommerce #retail #Shein #GameStop #eBay #QVC #GLP1 #DTC

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About

Stop reading the headlines and start understanding the frameworks. The Watson Weekly is the premier resource for eCommerce executives, delivering sharp, independent strategy on the industry's most critical developments. Join 20-year veteran Rick Watson as he cuts through the noise to help you understand not just what is happening, but why it matters to your business. Broadcasting three times a week: Mondays: Strategic deep dives into earnings, mergers, and market shifts. Wednesdays: Candid interviews with C-Suite luminaries and tech innovators. Fridays: Join the Watson Weekend for Spirited debates on controversial topics with co-host Jessica Lesesky. From AI implementation and marketplace dynamics to supply chain logistics and retail operations, we cover the entire commerce landscape. Whether you are a CEO, VP, or operator, this is your competitive advantage in audio form.

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